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A Breach in the No New Taxes Wall?

May 27th, 2012 . by economistmom

cracked-brick-wall-with-norquist-head

Rosalind Helderman of the Washington Post reports in Saturday’s paper that a “Faint rift opens in GOP over tax pledge”–referring to the pledge that Americans for Tax Reform’s Grover Norquist has compelled virtually all Republican policymakers to sign.  Helderman explains how the ground seems to be shifting:

In GOP activist circles it is known simply as “the pledge,” and over the past generation it has become the essential conservative credential for Republicans seeking elective office. Of the 242 Republicans in the House today, all but six have signed the pledge.

But now, an increasing number of GOP candidates for Congress are declining to sign the promise to oppose any tax increase, a small sign that could signal a big shift in Republican politics on taxes.

Of the 25 candidates this year promoted by the National Republican Congressional Committee as “Young Guns” and “Contenders” — the top rungs of a program that highlights promising candidates who are challenging Democrats or running in open seats — at least a third have indicated they do not plan to sign the pledge authored by anti-tax crusader Grover Norquist.

Why the change in heart?  For one reason, because the lopsided, no new revenues (not just no new higher tax rates) stance just doesn’t make policy sense to many of these Republicans, who can’t see how spending-side-only approaches are easier than approaches involving a mix of spending cuts and revenue increases:

Republican candidates declining to sign generally indicate that they nevertheless oppose tax hikes. But some chafe against the constraint on eliminating tax loopholes, believing those restrictions limit Republicans’ ability to negotiate seriously with Democrats on a deal to tackle the nation’s mounting debt.

In Pennsylvania, Republican state Rep. Scott Perry said he was disappointed to see his party’s presidential candidates — all but one of whom signed the pledge — uniformly indicate in a debate last year that they would reject a deficit reduction deal that paired $1 in revenue increases for every $10 in spending cuts.

“I just think it’s imprudent to hem yourself in where you can’t make a good agreement that overall supports the things you want to do,” said Perry, who said he generally opposes tax increases but recently won a Republican primary in a conservative district over candidates who had signed the pledge. “I just don’t see what the point of signing would be for me. .?.?. I’ve got a record, and everyone who wants to know where I’ve been and where I’m at can look to that.”…

“I don’t want to get tied up in knots,” said Richard Tisei, an NRCC Young Gun and former Republican state senator in Massachusetts who is running against Democratic Rep. John F. Tierney. “If there’s a loophole that can be closed that ends up generating additional revenue that can be used specifically to pay down the national debt, I’m not going to lose sleep. And I don’t want to be bound by the pledge not to close it.”

The refusals among some new candidates come as a handful of incumbent Republicans who signed the pledge when they first ran for office also are publicly rejecting it.

Freshman Rep. Scott Rigell (R-Va.), who signed the pledge in 2010, recently posted an open letter to constituents indicating that he would not renew the promise as he runs for reelection. He said he fears it could stand in the way of an everything-on-the-table approach to tackling the mounting debt.

“Averting bankruptcy requires us to grasp the severity of our fiscal condition and summon the courage to speak boldly about the difficult steps needed to increase revenues and sharply decrease spending,” he wrote.

For another reason, it seems that voters don’t find a candidate’s blind allegiance to one man’s idea of the best fiscal policy very attractive:

[A]fter months of Democratic attacks on ATR and Norquist as obstacles to a debt deal, some Republican candidates report that they are hearing from more voters who want them to reject the pledge than the opposite.

Gary DeLong, a member of the Long Beach City Council who is labeled a “contender” for a House seat by the NRCC, said he is routinely encouraged on doorsteps and at town halls and candidate coffees to avoid the pledge.

Voters “ want me to represent them and not special interests,” said DeLong, who will compete next month in California’s unusual mixed-party primary for one of two spots on the November ballot in a newly drawn district.

What is it that has kept so many Republican policymakers so enthralled with Norquist, despite all the evidence to the contrary that “no new taxes” just makes no sense–and (perhaps the most puzzling part) despite Norquist’s lack of charisma?  Senator Coburn has certainly been working to get his colleagues to snap out of the Norquist trance; the Post article concludes with this:

Sen. Tom Coburn (R-Okla.), a fiscal conservative who has tangled with Norquist, said he believes candidates are starting to understand that the ATR pledge’s power has been exaggerated by Norquist and the media and that Norquist is wrong when he asserts that it is nearly impossible to win a Republican primary without signing the pledge.

“That’s him patting himself on the back,” Coburn said. “And I think it’s bull crap.”

[UPDATE 3 pm Sunday:] And this just out from another Republican who’s even more fed up than Coburn about Norquist… Former Senator and co-chair of President Obama’s fiscal commission, Alan Simpson, had this to say today on CNN’s Fareed Zakaria GPS (as reported on Talking Points Memo):

“For heaven’s sake, you have Grover Norquist wandering the earth in his white robes saying that if you raise taxes one penny, he’ll defeat you,” [Simpson] added. “He can’t murder you. He can’t burn your house. The only thing he can do to you, as an elected official, is defeat you for reelection. And if that means more to you than your country when we need patriots to come out in a situation when we’re in extremity, you shouldn’t even be in Congress.”

39 Responses to “A Breach in the No New Taxes Wall?”

  1. comment number 1 by: Patrick R. Sullivan

    ‘…uniformly indicate in a debate last year that they would reject a deficit reduction deal that paired $1 in revenue increases for every $10 in spending cuts.’

    Yeah, shame on them for refusing to indulge a fantasy. But, if you could actually get $10 in spending cuts you wouldn’t need increased tax revenue would you?

  2. comment number 2 by: Vivian Darkbloom

    “But, if you could actually get $10 in spending cuts you wouldn’t need increased tax revenue would you?”

    Yes, but only if one were to add about 11 zeros to that $10.

  3. comment number 3 by: Vivian Darkbloom

    People like Grover Norquist serve a valuable function for those in a party who really do the negotiating. They stake out an extreme position that is more or less in line with party ideology and pledge to stick to it to the bitter end. Boehner can then go to Obama and say “listen, I’d really like to do this deal, but Grover and his followers would kill me”. How much of this is negotiating tactic and how much is real conviction is hard to judge. Norquist would likely be a good poker player. His job is to keep everyone guessing he’s holding the cards. And, so far, he’s performed that function perfectly.

    Now, Economist Mom, perhaps you could do a follow-up on the other side of the spectrum because, you know, there is another side. Grover is not the only one who serves this type of function. Let’s take, for example, Paul Krugman. Paul and his considerable following have staked out a position that government needs to expand, and even if it doesn’t need to, it should. That sure sounds to me like a pledge not to cut spending. When is the last time you heard Paul say, let’s cut government spending (for real)? I doubt he would even advocate cutting the growth of spending.

    I’m sure this enables Obama to say to Boehner “Listen, I’d really like to do a deal, but Paul and his considerable following on the left flank of the party would kill me”.

    I suppose those tactics have their time and place, but that doesn’t seem appropriate now. Let’s hope Boehner and Obama, or whoever is negotiating the deal, put their cards on the table, because before long their hands will be forced by the markets.

    Arnold Kling, via the recent post here by Jim Glass, got it right: At this stage of the game, any further delays mean that everyone gets *less* than what they want.

  4. comment number 4 by: David @ Engage America

    America needs tax reform badly and the Bowles-Simpson plan is the most sensible place to start.

    If Congress had implemented the Bowles-Simpson plan when it was first proposed then the tax code would already be simpler, fairer, and better suited to support economic growth. http://bit.ly/GVrWuY

    A Bowles-Simpson type “grand bargain,” which leaves no sacred cows untouched, is the best way to get our economy back on track. http://bit.ly/noTDPF

  5. comment number 5 by: AMTbuff

    Obama failed a basic leadership test when he discarded Bowles-Simpson.

    Norquist has always been a paper tiger. How can you take seriously tough talk from someone who shares a name with a lovable muppet from Sesame Street?

  6. comment number 6 by: B Davis

    Now, Economist Mom, perhaps you could do a follow-up on the other side of the spectrum because, you know, there is another side. Grover is not the only one who serves this type of function. Let’s take, for example, Paul Krugman. Paul and his considerable following have staked out a position that government needs to expand, and even if it doesn’t need to, it should. That sure sounds to me like a pledge not to cut spending. When is the last time you heard Paul say, let’s cut government spending (for real)? I doubt he would even advocate cutting the growth of spending.

    There are a couple of differences between Norquist and Krugman. According to former Senator Alan Simpson, Norquist believes in “No taxes, under any situation, even if your country goes to hell.” Krugman at least claims that his aversion to cutting spending will be limited to the economic and jobs crisis. Of course, the big difference is that 279 complete idiots in Congress have signed Norquist’s pledge. I will apply the same apt description to Democrats when and if they sign a Krugman pledge to never to cut spending.

  7. comment number 7 by: Steveinch

    B Davis.

    I’d rather have 100 years of history on my side than a pledge. Point out for us the last time Washington cut spending, at least since 1947.

    You don’t need to sign a pledge to increase spending, you just do it. Enron the “austerity” budget proposed by Congressman Ryan grows sending on average 3.1% per year.

    When 3.1 percent growth is characterized as austerity or massive cuts, why would a pledge ever be necessary?

  8. comment number 8 by: B Davis

    Steveinch wrote:

    I’d rather have 100 years of history on my side than a pledge. Point out for us the last time Washington cut spending, at least since 1947.

    If you’re going to look at spending over time, you need to correct it for inflation and population growth. A good estimate of this is spending as a percent of GDP. This measure (percent of GDP) also has the advantage of being a good measure of what we can afford.

    The first graph and second table at this link show that spending dropped from 23.5% of GDP in 1983 to 18.2% of GDP in 2001. The second graph and tables at this link show that much of that was National Defense. However, they also show that spending other than National Defense, Health, Medicare, Income Security, Net Interest, Commerce, and Undistributed Offsetting Receipts more than halved from 5.933% of GDP in 1978 to 2.879% of GPD in 1998. The third and fourth graphs show that that drop included drops in Education, Veteran’s benefits, Transportation, International, General government, Agriculture, Natural Resources, and Energy.

    You don’t need to sign a pledge to increase spending, you just do it. Enron the “austerity” budget proposed by Congressman Ryan grows sending on average 3.1% per year.

    Still, signing a pledge locks you into a broad policy regardless of facts that you later discover or that later develop. Hence, I consider the 279 members of Congress who signed Norquist’s pledge to be idiots and/or cowards looking to hold on to their jobs at any cost. I have no plans to ever support any of them. However, I also have no plans to engage in the idiocy of signing any pledges on that!

  9. comment number 9 by: SteveinCH

    If you’re going to look at spending over time, you need to correct it for inflation and population growth. A good estimate of this is spending as a percent of GDP.

    No, it’s not a good estimate. Here’s a graph of real, per capita spending since WWII.

    http://www.usgovernmentspending.com/spending_chart_1947_2011USd_13s1li011mcn_F0f

    Notice the difference?

    As to signing a pledge, it locks you into nothing. As I said, I’d rather have 6 decades of practice on my side than a piece of paper.

  10. comment number 10 by: Vivian Darkbloom

    “If you’re going to look at spending over time, you need to correct it for inflation and population growth.”

    It’s hard to argue that a chart showing real per capita spending is not the best measure of that. It is not an “estimate”; it’s the real thing!

  11. comment number 11 by: B Davis

    SteveinCH wrote:

    No, it’s not a good estimate. Here’s a graph of real, per capita spending since WWII.

    I did speak too quickly in calling it a “good estimate”. I believe that one of the main differences is that GDP growth is affected by the growth in productivity. However, it’s not unreasonable to suggest that the fruits of this gain in productivity be taxed such that revenue as a percentage of GDP remains fairly constant. As can be seen in the first graph and second table at this link, revenue as a percentage of GDP has been fairly stable since WWII, as least until the past few years. This means that we can likely afford to keep spending stable as a percentage of GDP. This would effectively share the fruits of productivity gains between all segments of society. Whether this is just is a matter of opinion and a debate for another day.

    However, I did recall that I have previously posted some real per-capita spending numbers at this link. As you can see, Social Security, Medicare, and Health (which is chiefly Medicaid) rose steadily from 1980 to 2000. However, you can see that the large portion of federal spending labeled Other(2) dropped significantly in real, per-capita numbers from 1978 to 1998. This includes everything except Defense, Social Security, Medicare, and Health, Net Interest, Income Security, and Commerce (including the S&L bailout). You can just lump all categories of spending together any more that you can just lump all categories of taxes together.

    As to signing a pledge, it locks you into nothing.

    Then what is the point of the pledge!!! Following is the House pledge:

    Taxpayer Protection Pledge
    I, _______________, pledge to the taxpayers of the _____ district
    of the state of__________, and to the American people that I will:
    ONE, oppose any and all efforts to increase the marginal income tax
    rates for individuals and/or businesses; and
    TWO, oppose any net reduction or elimination of deductions and
    credits, unless matched dollar for dollar by further reducing tax rates.

    Do you think that Norquist and voters would accept the following additional line?

    Note: The above pledge locks me into nothing.

    You need to pick a side. Does this pledge have any meaning or not?

  12. comment number 12 by: Steveinch

    Two things

    1. There are twelve years since 2000 that are worth looking at

    2. Other didn’t decline in your linked chart. What declined was defense.

  13. comment number 13 by: Vivian Darkbloom

    “However, it’s not unreasonable to suggest that the fruits of this gain in productivity be taxed such that revenue as a percentage of GDP remains fairly constant.”

    Actually, it is a basic feature of our tax system that government *automatically* taxes and takes a percentage (currently over 25 percent at all levels) of private sector productivity gains. But, there is absolutely no justification for this to be automatically so. If government productivity gains were to keep pace with private sector productivity gains, should it not be able to get by on taking *less* a percentage of GDP over time?

    The idea here seems to be that government should automatically be entitled to a certain percentage of GDP and *then* go out and find a way to spend it.

    As a matter of fact, if you look to this chart, government spending (at all levels) has gone up tremendously over the past several decades and is now about 40 percent of GDP:

    http://www.usgovernmentspending.com/spending_chart_1960_2010USp_13s1li011mcn_F0t

    And, according to the last CBO Long-Term Budget Projection, total *federal spending alone* is expected to rise from 24.1 percent of GDP to 33.9 percent in 2035.

    http://www.cbo.gov/sites/default/files/cbofiles/attachments/06-21-Long-Term_Budget_Outlook.pdf

    Now, I’m sure you are tempted to reply “we’re talking only about the federal government”. Yes, but that would be a big mistake. The current level of state government spending (and taxing) has everything to do with the federal budget (and federal policy, generally). Much of that state and local spending, and the resulting need to increase taxes, is a direct result of federal programs. Grant in aid programs such as Medicare drive up state budgets tremendously. Consider even the recent federal push to save those state and local government jobs. The idea is, we’ll save those jobs for you for two years or so; after that, you pick up the bill for the next 20 or so. And, good luck keeping up with those ever-increasing demands of public sector unions, whose rights to blackmail you we’ve guaranteed and enhanced in return for votes. There are now over 1,100 grant in aid programs!

    http://www.cato.org/pubs/tbb/tbb_63.pdf

    Put all this in the category of “off balance sheet accounting” that the federal government excels in.

    As to the “pledge”, it means exactly what I said it means in the first post. Just like a party platform, it is a base to negotiate from. The problem is, that, in the hands of an ideologue, any position that is ultimately non-negotiable is untenable in our political system. Politics is, after all, the art of compromise. That goes equally for Norquist as it does, say, for Krugman and that is precisely the point I tried to make in the original comment. The fact that “the pledge” is in writing is irrelevant. These types of “promises”, tacit or implict, are not “contracts” and the statute of frauds does not apply.

    Nevertheless, if you want a written document pledging not to cut spending, here’s “The People’s Budget”, enthusiastically endorsed by Krugman:

    http://cpc.grijalva.house.gov/index.cfm?sectionid=70&sectiontree=5,70

    As you can see from the document, this plan proposes to “cut” spending by $1.7 trillion over a 10-year period. Problem is, half of that is in alleged reduction in interest outlays and some of the other half is illusory “savings” in Medicare and Medicaid and claiming credit for the wind-down in defense spending that will happen anyway. But, here’s the real howler: increases in “investment” of $1.7 trillion don’t seem to be counted as “spending”. They did not dare run this by the CB, and for good reason. The EPI that did the scoring did not take into account the effect of their tax policy on economic growth because that was beyond the ability of their model to do. What is truly amazing is that on its face this is an extreme austerity budget because of the tremendous increase in taxes before 2014. Yet, Krugman endorses it!

    And, here’s the “Progressive Promise”:

    http://cpc.grijalva.house.gov/index.cfm?sectionid=63&sectiontree=2,63

    Sounds high tone, but it’s pretty hard to even imagine spending cuts fitting into that promise.

    I’ll be the first to admit that, by all appearances, Norquist is an intransigent ideologue. But, reading his pledge against the other side of the spectrum’s pledge and budget, I’d have to say that he’s probably the more honest ideologue. The point is, they both sides represent extreme positions that have zero chance of being realized and they are put out there solely to try to move the ultimate compromise slightly in one direction or the other. It is simply not helpful (unless you are a progressive ideologue) to fail to recognize that fact. (And, Krugman would reply: “Of course, the media shouldn’t make that comparison—there is no equivalence because we are right!)

  14. comment number 14 by: B Davis

    Steveinch wrote:

    Two things

    1. There are twelve years since 2000 that are worth looking at

    2. Other didn’t decline in your linked chart. What declined was defense.

    I’ll address those two things after you answer the question I asked in my prior email. I’ll repeat it below.

    Following is Norquist’s Taxpayer Protection Pledge (this time the Senate version):

    I, _______________, pledge to the taxpayers of the state
    of _______________, and to the American people that I will:

    ONE, oppose any and all efforts to increase the marginal income tax
    rates for individuals and/or businesses; and

    TWO, oppose any net reduction or elimination of deductions and
    credits, unless matched dollar for dollar by further reducing tax rates.

    Do you think that Norquist and voters would accept the following additional line?

    Note: The above pledge locks me into nothing.

    Remember that you said that the pledge “locks you into nothing”. What is the point of a pledge if it locks you into nothing?

  15. comment number 15 by: Steveinch

    Read Vivian’s post. It is to set a negotiating position and create leverage.

    But unless Grover Norquist has acquired mysterious powers, he cannot enforce. It’s not a contract and not enforceable in any sense

    I didn’t ask you any questions. I simply pointed out the weakness in your analysis. If you want to answer questions try these

    1. Why should government spending increase faster than inflation plus population? Such an approach implies diseconomies of scale which makes no sense to me.

    2. What is the growth rate of spending in the Ryan budget? If this is the most “auster” budget we can imagine, what need for a pledge to continue to increase spending in real per capita terms in perpetuity?

  16. comment number 16 by: AMTbuff

    >What is the point of a pledge if it locks you into nothing?

    It locks you into explaining to your voters why the deal you got was so wonderful that breaking your promise was justified. This is the test that Bush 41 failed, although arguably he could have passed the test had Gingrich not reneged on his support for the original deal.

  17. comment number 17 by: Patrick R. Sullivan

    ‘…spending dropped from 23.5% of GDP in 1983 to 18.2% of GDP in 2001.’

    I’ve seen some cherry picking in my time, but that takes the cake.

  18. comment number 18 by: B Davis

    Patrick R. Sullivan wrote:


    ‘…spending dropped from 23.5% of GDP in 1983 to 18.2% of GDP in 2001.’

    I’ve seen some cherry picking in my time, but that takes the cake.

    Likewise, I’ve seen quotes taken out of context but your example takes the cake. If you read all of the comment that you quoted (#8), you’ll see that I was quoting Steveinch’s comment (#7) which states:

    Point out for us the last time Washington cut spending, at least since 1947.

    I gave the last period that spending was cut, at least as a percentage of GDP. You then called my direct answer to Steveinch’s request “cherry-picking”.

  19. comment number 19 by: B Davis

    AMTbuff wrote:


    >What is the point of a pledge if it locks you into nothing?


    It locks you into explaining to your voters why the deal you got was so wonderful that breaking your promise was justified. This is the test that Bush 41 failed, although arguably he could have passed the test had Gingrich not reneged on his support for the original deal.

    Then why not sign a pledge that says the following:

    I, _______________, pledge to the taxpayers of the state
    of _______________, and to the American people that I will:

    ONE, explain to voters why any political deal to which I agree that raises taxes is so wonderful so as justify that action.

    TWO, will not sign any idiotic pledges with which I do not fully agree in order to cow tow to ideologues and curry favor with voters.

    Regarding exceptions for breaking the pledge, following is from the Federal Taxpayer Protection Pledge Q & A on Norquist’s ATR site:

    Can the language of the Pledge be altered to allow exceptions?

    No. There are no exceptions to the Pledge. Tax-and-spend politicians often use “emergencies” to justify increasing taxes. In the unfortunate event of a real crisis or natural disaster, the legislator should propose spending cuts in other areas to finance the emergency response.

    Hence, even emergencies are not allowed to effect the pledge. Hence, signers of the pledge and their supporters are signing on to an extreme position to satisfy ideologues but telling everyone else to “pay no attention to that pledge behind the curtain”. Good luck on selling that.

  20. comment number 20 by: Vivian Darkbloom

    “I gave the last period that spending was cut, at least as a percentage of GDP”.

    Using federal spending as a percentage of GDP to the exclusion of other measures (i.e., real per capita spending) is not cherry picking, particularly when you were subsequently forced to admit that it would not be a good measure for the question that was presented?

  21. comment number 21 by: Alan Reynolds

    “The lopsided, no new revenues (not just no new higher tax rates) stance just doesn’t make policy sense ” to anyone who understands the high elasticity of taxable income with respect to marginal tax rates, particularly on unincorporated business income, dividends and capital gains. A flatter tax (as in 1988-90) is not consistent with the current rates of 10-35%, yet Grover’s pledge would rule out switching to a 15-30% rate structure, because that would clearly raise revenue even in static terms.

  22. comment number 22 by: SteveinCH

    So B Davis, I answered your question, will you answer mine?

  23. comment number 23 by: Vivian Darkbloom

    “The lopsided, no new revenues (not just no new higher tax rates) stance just doesn’t make policy sense ” to anyone who understands the high elasticity of taxable income with respect to marginal tax rates, particularly on unincorporated business income, dividends and capital gains. A flatter tax (as in 1988-90) is not consistent with the current rates of 10-35%, yet Grover’s pledge would rule out switching to a 15-30% rate structure, because that would clearly raise revenue even in static terms.”

    That’s interesting. I suspect that under the rate structure you have in mind, this would constitute a tax increase, primarily on the lower income cohorts. Are you suggesting that Grover is a closet progressive?

  24. comment number 24 by: Patrick R. Sullivan

    I think Alan Reynolds is making point I made in a previous EconMom post. Raising the rate of the lowest bracket increases taxes paid by even the highest income earners. And, unlike raising the top rate, they can’t avoid paying it.

  25. comment number 25 by: Vivian Darkbloom

    “I think Alan Reynolds is making point I made in a previous EconMom post. Raising the rate of the lowest bracket increases taxes paid by even the highest income earners. And, unlike raising the top rate, they can’t avoid paying it.”

    I doubt it. Your point is valid only if the *highest* marginal rate is not also reduced; but, Reynold’s example proposes to do exactly the latter. I seriously doubt that your point is the one that Reynolds was trying to make because he also presumes a reduction in the highest marginal rate. The issue is then whether the total tax collected (under a static analysis) as a result of increasing intermediate rates (affecting also high income earners) out-weighs the tax foregone by lowering the highest marginal rate. I have to presume that is true because he wrote “clearly that would be the case” with a 15%/30% rate structure. Only Reynolds can tell us what he meant.

    The comment literally says that the highest marginal tax rate has the highest elasticity effect on taxable income. That is not a controversial economic proposition. Stated otherwise, if you lower the *highest* taxable rate it will have more of a positive effect on incentives than if you raise intermediate marginal rates and therefore a greater positive effect on economic output (and revenues) than if you raise *intermediate* marginal rates. But, that is a *dynamic* consequence, not a *static* one.

    Also, what Reynolds wrote is that under his scenario (15 percent and 30 percent rate structure) even the *static* revenues would go up. It is not clear at what point his 15 percent rate and his 30 percent rate would kick in, but if this is a *static* analysis, one must presume that more revenues would be raised, incentive (dynamic) effects notwithstanding. I don’t possess the model, so I can’t confirm what the *static* consequences would be under this scenario. But, I strongly suspect that a distributional analysis of the *static* consequences of such a proposal would result in nearly all cohorts paying higher tax, but the lowest cohorts paying a proportionately higher amount than the highest cohorts But, if a *dynamic* analysis would be applied, the federal government would collect even more tax than under this static approach because the postive incentive effects on the highest cohorts would outweigh the negative incentive effects on the lowest.

    So if, as claimed, Grover is opposed to the *static* consequences of raising intermediate marginal rates and lowering highest marginal rates, he must be a closet progressive, as well as a bad econometrician, or at least one who places a greater value on the distributional effects than on the total revenue effects of such a proposal.

  26. comment number 26 by: B Davis

    Vivian Darkbloom wrote:

    “I gave the last period that spending was cut, at least as a percentage of GDP”.

    Using federal spending as a percentage of GDP to the exclusion of other measures (i.e., real per capita spending) is not cherry picking, particularly when you were subsequently forced to admit that it would not be a good measure for the question that was presented?

    You guys really stick up for each other, don’t you!? In any case, your statement is as incorrect as Patrick’s was. Following is exactly what I said in comment number 11:


    I did speak too quickly in calling it a “good estimate”. I believe that one of the main differences is that GDP growth is affected by the growth in productivity. However, it’s not unreasonable to suggest that the fruits of this gain in productivity be taxed such that revenue as a percentage of GDP remains fairly constant. As can be seen in the first graph and second table at this link, revenue as a percentage of GDP has been fairly stable since WWII, as least until the past few years. This means that we can likely afford to keep spending stable as a percentage of GDP. This would effectively share the fruits of productivity gains between all segments of society. Whether this is just is a matter of opinion and a debate for another day.

    Hence, I admitted that spending as a percentage of GDP is not a good estimate of spending corrected for inflation and population growth. But I went on to state that it is not unreasonable to look at spending as a percentage of GDP. In fact, Economist Mom’s posting of June 5th mentions that many anti-tax policymakers look at percentage of GDP for revenues, stating the following:


    …revenues only reach 18.5 percent of GDP in 2037–which happens to be right around the 40-year historical average policymakers who don’t want to raise taxes like to label the “right” level of revenues for the future.

    In any case, I’m still amazed that nobody here seems to think that the Norquist pledge may mean exactly what it says. Once again following is the House pledge:


    I, _______________, pledge to the taxpayers of the _____ district
    of the state of__________, and to the American people that I will:

    ONE, oppose any and all efforts to increase the marginal income tax
    rates for individuals and/or businesses; and

    TWO, oppose any net reduction or elimination of deductions and
    credits, unless matched dollar for dollar by further reducing tax rates.

    The pledge absolutely opposes all tax increases. As I mentioned in comment number 19, the Federal Taxpayer Protection Pledge Q & A on Norquist’s ATR site states that “In the unfortunate event of a real crisis or natural disaster, the legislator should propose spending cuts in other areas to finance the emergency response”. Hence, all emergencies are to be paid for by sacrifices borne by those receiving government services, regardless of whether those services are earned or deserved. Taxpayers will sacrifice nothing regardless of the emergency or how much that stand to benefit from its resolution.

    By the way, it appears that Norquist believes that this no-exception pledge lasts forever, even if it is not renewed. There’s an interesting story in The Hill titled GOP lawmakers want out of tax pledge. Following is an excerpt:


    Norquist’s advocacy group, Americans for Tax Reform, lists 238 House signers of its Taxpayer Protection Pledge, but several House Republicans, and at least one Democrat, now say the anti-tax group is being deceptive and want their names taken off the list.

    “I haven’t signed it since 1994,” Rep. Steven LaTourette (R-Ohio) said, explaining that he didn’t even remember endorsing the pledge until Americans for Tax Reform produced the original document earlier this year.

    In its publicly displayed list of signers “in the 112th Congress,” Norquist’s group includes several members who say they have specifically refused to sign the pledge during their most recent campaigns.

  27. comment number 27 by: Steveinch

    Still not willing to answer my questions I guess BDavis?

    We get you don’t like the Norquist pledge. I rather doubt any of us here do. That said, I think some of us disagree it is the great evil that you think it is.

    And somehow, you never want to answer the question of why taxes are raised frequently and spending is almost never cut in real per capita terms.

    If the pledge were important, would not the opposite outcome be more likely?

  28. comment number 28 by: B Davis

    On June 4th, 2012 at 8:56 am, Steveinch wrote:

    1. Why should government spending increase faster than inflation plus population? Such an approach implies diseconomies of scale which makes no sense to me.

    2. What is the growth rate of spending in the Ryan budget? If this is the most “auster” budget we can imagine, what need for a pledge to continue to increase spending in real per capita terms in perpetuity?

    On June 6th, 2012 at 8:20 am, Steveinch wrote:

    Still not willing to answer my questions I guess BDavis?

    Patience, grasshopper. It was less than three days ago that you asked the question and I’ve been answering other posts. Also, I’m busy with some overtime at work and other things.


    And somehow, you never want to answer the question of why taxes are raised frequently and spending is almost never cut in real per capita terms.

    As can be seen in the third graph and table at this link, the top marginal rate has dropped from 91% in 1963 to 35% now. Hence, not all taxes have been raised frequently. Regarding spending, I pointed out a 20-year period during which a large portion of spending did decline real per capita terms. In comment number 11, I said the following:


    However, I did recall that I have previously posted some real per-capita spending numbers at this link. As you can see, Social Security, Medicare, and Health (which is chiefly Medicaid) rose steadily from 1980 to 2000. However, you can see that the large portion of federal spending labeled Other(2) dropped significantly in real, per-capita numbers from 1978 to 1998. This includes everything except Defense, Social Security, Medicare, and Health, Net Interest, Income Security, and Commerce (including the S&L bailout). You can’t just lump all categories of spending together any more than you can just lump all categories of taxes together.


    If the pledge were important, would not the opposite outcome be more likely?

    The pledge says nothing about spending, only that taxes cannot be raised under any circumstance. It would only affect spending if you believed in “starve the beast”. In fact, the pledge has served to “feed the deficit”. Hence, I don’t see how we can start to deal with the deficit until those who signed the pledge withdraw their support or are voted out of office.


    We get you don’t like the Norquist pledge. I rather doubt any of us here do. That said, I think some of us disagree it is the great evil that you think it is.

    I’m glad to hear you state that you do not like the Norquist pledge. Anyhow, let’s check your suspicion that none of us here do like it. Is there anyone reading this who does like the Norquist tax pledge?

  29. comment number 29 by: SteveinCH

    Well, B Davis, I never said there wouldn’t be tax decreases, I said Congress has shown more willingness to increase taxes (last done in the ACA) than to constrain the growth of spending (last done pretty much never)

    As to your bolded point, you are misreading your own chart. In both graphs you posted, other increases. Only by cherry picking a date range and a specific subcategory of spending can you show a decline in spending.

    Of course you can (and should) lump categories of spending and taxes together. The government has a lot of bills and collects a lot of taxes. The change by categories is a reflection of priorities on both sides.

    Thanks for the discussion but it’s pretty clear that you’re going to stay focused on a minor irritation (Norquist) in the midst of a root cause (profligate spending).

    But I will add the following chart just for your edification…taxes paid by Americans in inflation adjusted, per capita terms since WWII.

    http://www.usgovernmentrevenue.com/revenue_chart_1947_2017USd_13s1li011mcn_F0f

    Absent recessionary impacts, do you see a pattern?

  30. comment number 30 by: Vivian Darkbloom

    ” Anyhow, let’s check your suspicion that none of us here do like it. Is there anyone reading this who does like the Norquist tax pledge?”

    B. Davis,

    I’m going to do you one better. Not only am I not going to affirm your suspicion by silence, but if there was ever any doubt (and I trust there was not) , I will affirmatively confirm that I don’t like the Norquist pledge. As I said originally, it is a negotiating tactic that at this point in the game, at least, has no place in responsible budget politics. And, I also think it is a good idea to smoke out those intransigent ideologues through the tyoe of challenge you made.

    So, I’m going to ask this: What is worse, pledging to never raise taxes as the Norquist pledge purportedly requires, or to promise not only to never cut spending, but to promise to continuously and steadily raise that spending? Do you agree with the Progressive promise to increase real spending, or do you reject it?

  31. comment number 31 by: B Davis

    Vivian Darkbloom wrote:


    ” Anyhow, let’s check your suspicion that none of us here do like it. Is there anyone reading this who does like the Norquist tax pledge?”

    B. Davis,

    I’m going to do you one better. Not only am I not going to affirm your suspicion by silence, but if there was ever any doubt (and I trust there was not) , I will affirmatively confirm that I don’t like the Norquist pledge. As I said originally, it is a negotiating tactic that at this point in the game, at least, has no place in responsible budget politics. And, I also think it is a good idea to smoke out those intransigent ideologues through the tyoe of challenge you made.

    Thanks. However, it was actually SteveinCH’s suspicion in that it was he who said “I rather doubt any of us here do [like the Norquist pledge]“. I wasn’t so sure since that several people seemed to be defending it as a negotiating tactic.


    So, I’m going to ask this: What is worse, pledging to never raise taxes as the Norquist pledge purportedly requires, or to promise not only to never cut spending, but to promise to continuously and steadily raise that spending? Do you agree with the Progressive promise to increase real spending, or do you reject it?

    I would need to actually see the wording of this Progressive promise to judge that. As I said in comment number 6, “I will apply the same apt description [idiots] to Democrats when and if they sign a Krugman pledge to never to cut spending”. The thing about the pledge is that it very clearly opposes all increases in marginal rates, without exception. I think it’s impossible that we can ever reach a deal to address the deficit as long as 279 members of Congress have signed an extreme pledge that makes any compromise impossible. Can you point to any such pledge by Progressives? I would prefer to address a real pledge but, if you are unable to find one, I suppose you could write up a short pledge (one or two points) which you believe is a Progressive equivalent to the Norquist pledge and I’ll take a look at it.

  32. comment number 32 by: Steveinch

    So you still think a pledge is more important than actions?

  33. comment number 33 by: Vivian Darkbloom

    B. Davis,

    I’ve already given you the Promise and the Progressive Budget. See comment 13. Those are promises not to cut real spending, which you will have to admit, unless your aim here is to simply engage in sophistry. And, as Steve correctly points out, we’ve not only got the rhetoric but a lot of history to back that up. Your likely response: “Well, it does not say that directly”. And, I would agree that the only difference is that it is not as honest as the Norquist pledge. It is the kind of sophistry that you are engaging in that leads people like Norquist and his followers to think they can’t trust proponents of larger government—ever–to reduce spending. Frankly, I didn’t start this discussion with that belief, but I’m beginning to think he may just have a point. Thanks for the education.

    As far as the pledge not to raise marginal tax rates is concerned, that actually constitutes pretty good economics. In fact, even a number of moderate progressives would agree to that. Your beef, if you have one, should be against a pledge never to raise additional revenues. And, I can’t speak for Norquist, but I don’t believe that pledge precludes lowering marginal tax rates and paying for them by eliminating tax expenditures (using static scoring). *That* would raise additional revenues, no doubt about it, even though it would not technically violate the pledge, as I understand it.

  34. comment number 34 by: Vivian Darkbloom

    Also,

    “I wasn’t so sure since that several people seemed to be defending it as a negotiating tactic.”

    Then, you did not read my original comment very carefully, nor do I think you are reading the other comments carefully, either. What I am advocating against is ideological intransigence on *both* sides of the spectrum. You apparently don’t want to see it, but when you’re in the ideological woods, I guess you are not going to see the forest. I suppose if I had written that Willie Sutton was a skillful bank robber you would have interpreted that to mean I advocate robbing banks.

  35. comment number 35 by: AMTbuff

    Brooks (or Diane),
    How would you answer the Righty questions listed today at http://keithhennessey.com/2012/06/08/why-delay-austerity-decisions/

    Do you agree with the Lefty points listed there? If not, how would your responses differ? Specifically, how would you answer “What is your solution to the long-term fiscal problem, rather than your first step toward a solution?”

    I maintain that an ironclad long-term solution would stimulate the economy more than any amount of spending newly borrowed money. Even Paul Krugman would agree if the partisan shoe were on the other foot.

  36. comment number 36 by: Steveinch

    I maintain there is no such thing as an ironclad long term spending reduction plan. Such a beast simply does not exist. What is required is a change in mindset about spending. What is required is embracing the notion of a budget constraint. Until that is done, no long term plan is remotely credible, whether lefty or righty

  37. comment number 37 by: B Davis

    Steveinch wrote:

    So you still think a pledge is more important than actions?

    And you are still putting words in other people’s mouths? I of course never said that a pledge is more important than actions. In fact, a pledge tends to promote a certain action if the person giving the pledge has any integrity and intends to uphold the pledge. I checked online to see if I could find reliable numbers on how successful the Norquist pledge has been in that regard. I haven’t found much but I did run across a 60 Minutes interview with Norquist along with the transcript. I haven’t had a chance to watch it all but Norquist does say the following at the beginning:


    Norquist: The Republicans won’t raise your taxes. We haven’t had a Republican vote for an income tax increase since 1990.

    Kroft: And this was your doing?

    Norquist: I helped. Yeah.

    I also ran across a less-than-serious Daily Show interview of Norquist.

  38. comment number 38 by: Vivian Darkbloom

    Hennessey’s column is obviously in response to President Obama’s “economic” speech the other day. Economic is in quotes because it was a political speech, “right on cue” as Keith would say. Key talking points:

    –The US economy is facing “headwinds” from Europe but, rather condescendingly, I trust they know what to do;
    –As the sage one, I’m here to tell you that the US faces a short-term economic problem and a long-term one;
    –In order to address the short-term problem, Congress needs to pass my recycled “jobs bill” *right away* so that we can hire 450,000 unionized teachers, policemen and firemen.

    –And, in case you missed the subtext: I’m the only adult in the room, and it’s a big room. The entire world!

    Nary a word about fixing the long-term problem and all about deflecting blame to others. This is a pathetic lack of leadership.

    I used to buy this short-term versus long-term way of framing the debate, but now I see it as a big diversionary tactic, as Keith rightly points out. We’ve got a big problem. Period. There is no way to neatly divide it into short term and long term because the “short term” and the “long term” affect each other in a vicious circle.

    Those who frame the debate in this fashion are almost always doing so in order to get the spending up front, preferably lock them in place, and defer the hard choices to another day. And, as Steve correctly points out, getting people to make the hard choice is only the *first* step. The second, and the third and the fourth are sticking to those choices.

  39. comment number 39 by: Steveinch

    BDavis

    You are cute in a way. Remember when Republicans were leading the charge to stop the extension of the payroll tax holiday? Was that not a tax increase? Where was Grover?
    http://articles.latimes.com/2011/dec/08/nation/la-na-gop-tax-dilemma-20111208

    There you have quite a number of Republicans supporting a tax increase. If the pledge were so binding, how did that happen?
    http://politics.nytimes.com/congress/votes/112/house/2/72?ref=politics